The EIU view

The president, Mario Abdo, of the Partido Colorado took office in 2018, succeeding Horacio Cartes. We expect him to retain his predecessor's broadly orthodox economic policy stance and renew efforts against organised crime. This will support GDP growth rates averaging around 3.8% in 2019-23. However, governability is threatened by intra-party tension involving Mr Cartes, meaning that Mr Abdo has so far focused on building alliances, to the detriment of policy innovation.

Hizbullah involved in Paraguay?
The tri-border region is a hotbed for money-laundering and illicit activities. There are new accusations that Lebanon is protecting Hizbullah-linked cocaine trade in Latin America.

Government issues new 30-year bond
Paraguay issued sovereign external bonds for a total of US$530m. The bonds will have a coupon of 5.6%. The government will retain access to markets in the medium term.

Senate changes set stage for budget showdown
The Senate passed a revised version of the budget bill, which includes increased expenditures beyond those requested by the executive, setting the stage for future controversy.